How to Invest in the Stock Market

How to Invest in the Stock Market

8 min read

Are you looking for how to invest in the stock market with little money? There are a few strategies that you can do. If you have less than $5,000, you could sell credit spreads and make between $50 and $100 per trade. Naked calls and puts are also very profitable if you are good with technical analysis. Finally, you could use the Acorns App to invest your spare change when purchasing if you have a limited budget.

Here are a few ways on how to invest in the stock market with limited principle:

  1. Options – one of the best ways with accounts less than $5,000
  2. Credit spreads – regarded as “safer” and require the least amount of capital
  3. Naked options –  more profitable but more risky than Credit Spreads 
  4. Debit spreads – help to limit capital risk
  5. Iron condors – profitable in range-bound markets
  6. Penny stocks – very popular; but risky to hold
  7. Day trading  penny stocks: need at least $25,000 to avoid the PDT rule 
  8. Offshore brokers like CMEG & Ustocktrade can help avoid PDT
  9. Swing trading small cap stocks can be good with the right entry

People always ask us how to invest in the stock market with little money. But unfortunately, not everyone has a ton of money to invest. Investing used to be a thing only rich people did, but that isn’t the case any longer.

The world has grown up! Nowadays, people from all walks of life, whether rich, middle class, or poor, can invest and make a better life and future for themselves. You don’t need thousands of dollars to invest. You can take that small amount of money and grow it over time. Don’t expect to take $500 and turn it into a million dollars in a year. It takes time. The more you grow your stock trading account, the more you can invest in a trade.

You will not have much money forever, especially if you’re smart. So starting small is fine; the important part is starting!

There are a lot of people that put off investing because they think you have to have thousands of dollars to do so. Thankfully that is not the case these days. However, to be a good investor, you must develop good habits.

If you make investing a habit now, you’ll be in a good position later in life. This should be something they teach us in school, quite frankly, as early as middle school.

When you’re investing, being disciplined is super important. Investing can seem overwhelming at first. Maybe even a little scary. That’s why studying is important. Spending time around people who have invested a long time is also good.

Pick their brain, and ask them to share their wisdom. Learn from their mistakes.

How to Invest in the Stock Market

Practice

Is this stock bullish, or is it heading in a bearish direction? This is a question traders ask themselves before placing a trade. One of the first things to do when learning to invest in the stock market is to set up a practice account.

ThinkOrSwim has a fantastic simulated account where you can paper trade. Paper trading allows you to practice without using real money. This is especially important if you’re starting with a small amount.

Just like in golf; “one bad hole can ruin your day.” The same can be said regarding trading. Making one bad trade could blow your entire account. That is why at the Bullish Bears stress practice and education. The more trades you make; the more familiar you will  hundreds or thousands of practice trades.

When paper trading; learn how to read the charts, find the trends, understand technical analysis, and finally how to place a trade. These tools will help strengthen your skills as a trader on the journey to help make you successful. Practicing  you learn how to use the technical indicators that show you what a stock will do. 

Make mistakes while paper trading is important to practice, that loss is not going to wreck your account. Instead, it helps teach what went wrong and know what to fix to help make the next trade profitable.

Brokerage Accounts Are Important

Picking a brokerage account is important because of the fees they charge for a trade. For example, if you’re putting up $100 and the brokerage firm charges an $8 to $10 commission fee, you only have about $90.

That is why picking an investment firm that will work best for your situation. Maybe one with one with low fees. This is smart when learning to invest in the market. It allows a trader to practice without taking fees that take away from the principle of the account or profit of the trade. Many brokers offer Zero commissions for stocks (non OTC), while others have also reduced the fees for options as well. Find the broker that works best for your trading style. 

Robinhood and CMEG

Robinhood is another good one because they have ZERO commission fees. Click here to open a Robinhood brokerage account and receive a free share of a stock such as Apple, Ford, or Groupon!

Capital Markets Elite Group (CMEG) – This is a fabulous offshore broker that has NO PDT rule, uses DAS trader for a platform, provides 2.95 trades, and with a special discount from our community, use” cmegbullishbears” (case sensitive) when you sign up during the application process. CMEG has been around since 2013, is registered with the IRS, and is insured by Lloyds of London. They also offer 4:1 and 6:1 margins on accounts with $500, or $2500, respectively. We are using it for our main day trading platform and recommend it to everyone in our stock market community interested in active trading with a small account.

Small Investments Big Returns

When learning to invest in the stock market, the intent is small investments and big returns. In a perfect world, that would always happen, but instead, it makes a $25, $50, or $75 profit on a small investment.

Do not get caught up in making a large profit on every trade initially. Do not try and hit a homerun every at bat; base hits add up nicely. That is not to say it will not happen at times, however the focus should be on growing that account.

Finding stocks to trade that are not expensive can seem daunting, especially when starting. When thinking of investing, might often think of companies like Apple or Amazon.

Those can be good to hold as long-term investments, but if the goal is looking to make a profit if the short term, the cheaper stocks, think $3 to $10 is more appealing. Remember always to take a profit.

As you learn to invest in the stock market, traders will notice that investing can be emotional. Making winning trades exciting and losing money hurts.

Most traders are never going to win 100% of the time. Taking a loss is ok and part of the journey. Always protect your capital and follow your game plan! The key to market longevity is to take profits and cut losses quickly.

Frequently Asked Questions

  1. What should I invest 30K in:
  2. First of all never invest any money unless you know what you're doing
  3. Don't listen to anyone unless they are a professional
  4. A professional might suggest opening an IRA and invest some of that capital
  5. Consider investing in some gold and silver as a hedge or for times of uncertainty
  6. Put some into a brokerage account
  7. Learn options trading
  8. Credit spreads are a great and safe trading strategy to grow investment capital
  9. Facebook, Apple, Netflix, Google, and Amazon are solid large caps
  10. Dividend stocks long term could be good as well

  1. How can I invest with 100:
  2. First of all it's difficult to make money with this little capital
  3. Credit spreads might be best opportunity
  4. You might be able to buy and sell etf's (limitations due to capital requirements)
  5. Taking an investing course would be the best bet long term

  1. How can you start investing with $20:
  2. First of all good luck! That is not enough capital to get started
  3. Might be best to buy a book on investing
  4. If you want to grind it out then you might try an app like Acorns or Stash App
  5. Invest your spare change with debit card transactions on these trading apps
  6. Robinhood and Webull are commission free brokers
  7. Might be able to buy and sell some penny stocks but will be difficult to grow account 

Related Articles

Summer 2022 Stocks

Summer 2022 Stocks

We haven’t had a real summer in over a decade. Now that COVID restrictions are hopefully behind us, it’s time to enjoy summer’s warm months.

Read More »
FreeStockCharts Review

FreeStockCharts Review 2024

Our FreeStockCharts review breaks down their free charting platform service. With some sites, you don’t need any explanation as to what the site does. Freestockcharts.com

Read More »
Trading Scorecard Review

Trading Scorecard Review 2024

Trading Scorecard Review: They are a tool to help you understand your metrics, patterns and trading styles so you can improve them. Fundamentally, it will help you to

Read More »

FREE ONLINE TRADING COURSES

If you’ve looked for trading education elsewhere then you’ll notice that it can be very costly.

We are opposed to charging ridiculous amounts to access experience and quality information. 

That being said, our website is a great resource for traders or investors of all levels to learn about day trading stocks, futures, and options. Swing trading too! 

On our site, you will find thousands of dollars worth of free online trading courses, tutorials, and reviews.

We put all of the tools available to traders to the test and give you first-hand experience in stock trading you won’t find elsewhere.

Our content is packed with the essential knowledge that’s needed to help you to become a successful trader.

It’s important to treat day trading stocks, options, futures, and swing trading like you would with getting a professional degree, a new trade, or starting any new career.

Invest the proper time into your Trading Education and don’t try to run before you learn to crawl. Trading stocks is not a get-rich-quick scheme. It’s not gambling either, though there are people who treat it this way. Don’t be that person! 

STOCK TRADING COURSES FOR BEGINNERS

The Bullish Bears team focuses on keeping things as simple as possible in our online trading courses and chat rooms. We provide our members with courses of all different trading levels and topics.

If you’re a beginner, intermediate level, or looking for expert trading knowledge…we’ve got you covered. 

We have a basic stock trading course, swing trading course, 2 day trading courses, 2 options courses, 2 candlesticks courses, and broker courses to help you get started. Free.

Just choose the course level that you’re most interested in and get started on the right path now. Become a leader, not a follower. When you’re ready you can join our chat rooms and access our Next Level training library. No rush. We’re here to help.

Click Here to take our free courses.